This episode examines a critical gap in land valuation software: the inability to measure proximity to major roadways and adjust comparable sales accordingly, using a Texas subdivide analysis where subject property location in a rural triangle between interstate and state route created 20-30% value discount versus roadway-adjacent comps.
Key Takeaways:
- Roadway proximity creates comp adjustment blind spots No current software reliably measures distance from subject properties to major routes, forcing manual discount estimations of 20-30% for inferior locations.
- Post-tariff comps require April 2025 cutoff analysis All pending/sold comps after early April 2025 represent the new market reality—pre-tariff comps are increasingly obsolete.
- Static image analysis can’t calculate real distances AI models lack scale context to provide accurate measurements from aerial imagery without dynamic mapping infrastructure.
Listen to the full episode for the technical breakdown of why this feature remains unsolved and how to manually account for it in your underwriting.
(Podcast transcript below)
Hi, Chris Duff over at Serious Land Capital, vacant land funding partner. Today wanted to go over a feature that I would love to build into land price and, and, know, we kind of incorporate within our diligence at the moment. It’s just really hard to program. So
I was reviewing a possible Texas sub-divide just south of Dallas earlier today. It’s actually in a county that we were doing that 50 acre piece, the one that I’ve talked about a number of times over the past few months and that, you know, we’re still under contract to sell over the next couple months here.
have been some complications that have arisen, but ultimately we’re still in good shape at the moment. So when I was looking at these comps for this possible other subdivide, and this one’s smaller, it was closer to 25 acres, and the proposed plan was to divide it up into roughly one and a half to 10 acre parcels. So then you’re not
overloading the child parcel market, saturating it with exact same sizes and the property was actually closer to a triangle. So it did make sense from a possible carve out though, if you’re parcels below that 10 acre exception criteria within Texas, naturally you’re to have to go through the approval process at the county level.
that’s going to entail additional cost and possible risk there. So some of the comps did look pretty solid, especially on the sub five acre pieces. And we’ve worked in that county, but I wasn’t quite sold on the anticipated full exit. And part of the reason was, as I’ve remarked many times before, I think there’s a
in most parts of the country, a clear market.
kind of change of what are the words I’m looking for. There’s just a clearly before and after market of pre tariff trade war situation and post tariff trade war. Like I’ll look for really anything that was pending or sold after April or early April, 2025 though, again, you have to be careful for any of your sold comps that might’ve sold in like mid April, even late April.
Usually it’s a 30, 45 day closing period. So they might’ve gone under contract prior to early April. And, you know, not closing until like early May at the absolute soonest in virtually any case. So I really look for, okay, you know, what are those sold comps, you know, prior to that, but can we see anything that’s pending or.
you know, have have sold poster or early April and some markets are less affected than others. But I really like to see that breakdown and there wasn’t really any activity since then. But another piece for this particular one is that. The subject parcel was just a bit more rural than where most of those comps.
seemed to be and more of the comp seemed to be closer to one of the interstates that was going in the north south direction and then a larger state route that was going more east to west. So if you can imagine, I know auditory medium, but you kind of almost had perpendicular lines of the
interstate and then a larger state route and the subject property was kind of in the middle of that acute angle. So it was just in a more rural area compared to being closer to.
to those two larger roads or highways, whatever you want to label them as, then that’s where most of the comps were sitting were, you know, closer or, you know, within a few turns off of those larger roads. And that’s something that I’ve had in kind of like my plan development time.
pipeline, it’s like, I’ve seen this on other properties before. And it’s certainly a salient point because it’s like, okay, yes, these numbers in principle for sold comps or pending comps might match up more with what we think we can get out of the subject property, but it’s not quite as rural. usually I’m going to discount that further. But that’s a problem. if you’re really trying to
operationalize how to assess comps and even use, know, software type tools like what we’re trying to do in land price here. I, or any other, uh, uh, uh, pricing softwares. haven’t seen anybody be able to figure out how you can reliably pinpoint where precisely the subject property is in relation to a, um,
larger roadway. Yes, if you had the, you know, whatever the address is or the precise GPS locations and you manually decided, okay, this larger roadway is
what we want to orient to that it none. It’s like, it’s pretty simple. You could just, okay, plug into Google maps or have an API that automatically maps out the distance to that road. And then you can start adjusting. All right. How, how advantageous is the location of the subject property in relation to these roads? And then, you know, maybe some areas
there is less of a bias of sold comps towards some of these roads. Usually that is gonna be the case. So usually, I mean, it’s gonna be a positive circumstance regardless. But again, not always because you have to bake in, right, if like a residential is like literally right next to an interstate, that’s usually gonna be less of an advantage from just a sound pollution standpoint. So there…
There has to be some, again, why land can be so tricky to really systematize the valuation of various characteristics because subtle changes can dramatically impact value. But on average, if a subject is closer to a larger…
route, of, know, vehicular travel. it’s going to be more of an advantage. So I’ve just been trying to bat in my mind, okay, how would we do this? Could we, you know, try to have AI determine what classifies as a, more significant roadway.
to be able to map out, you know, the full state route, et cetera. And from an image analysis standpoint, that’s a little bit more difficult to do because we’re primarily using static images. You would need to have a dynamic platform because if some areas are like way out in the middle of nowhere, you’d have to have AI be able to zoom out within its own mapping infrastructure and determine, okay, yeah, this,
road actually fits the bill with what you’re looking for and then be able to determine how close it actually may be. But if we’re just trying to determine it from static images, that’s way harder and AI is not capable of.
accurately calculating measurements based on images because it doesn’t have a sense of scale besides what you tell the model through various prompting. So it can make like relational determinations, but it can’t actually give you real measurements. Okay, this is like, you know, 0.75 miles away.
without a firm indication. So like it gets complicated really quickly. And as far as I’m aware, I don’t know of any system doing this reliably at the moment. But it’s something that I keep coming back to because like this feature of pricing out properties is something that I just more actively consider.
And I see it come up more and more often when I’m trying to, especially if you’re doing subdivides and you really have to be certain. Okay. What is the true market activity within that specific like micro segment of the geological area, geographical area. Sorry. Flipping these words around.
then you just have to have even more conservative estimations in terms of, am I really gonna be sitting on this property for much longer? Do I need to reduce price considerably to both be undercutting my inferior location in relation to comms as well as undercutting the market overall to move faster than the average day-sum market. So that’s what I’ve been thinking about more of.
I don’t think I’ll be able to figure it out for the first, know, launch of land Pricer. but I wanted to mention it here in case, you know, it’s possible I’ve just missed something. Somebody has already come up with a creative solution for, figuring out how to, how, how to reliably measure this efficiently and accurately. but, as you saw when I was describing this, like, I think it’s just, it’s kind of complex to.
Ultimately determine. Okay, what classifies as a major route of? You know street travel versus not And how are you actually calculating distances so? Wanted to mention that one so that even if you aren’t using a software it should be something to pay attention to Whenever you’re pricing out properties Because yeah again, I just see it more and more often so hopefully this helps
in relation to your own DD and Looking forward to checking in again next time with that in mind If you’re looking for funding serious land capital land daily diligence Facebook group for zero cost review of your land deals about to hop on to one Here shortly and then landpricer.ai, which are just you know
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